Multimillion-dollar ticket scalpers can be beaten, says expert
Published Monday, November 13, 2017 10:55AM EST
Newly revealed evidence of a Montreal man’s multimillion-dollar ticket-scalping operation is casting light on a growing global industry that by one estimate could be worth as much as US$24 billion by 2021.
Julien Lavallee was named in the recently leaked “Paradise Papers,” the electronic archive of 13.4 million documents from an offshore law firm called Appleby, that formed the basis of a massive investigation by the International Consortium of Investigative Journalists.
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Lavallee is said to be a high-volume broker of tickets for top-selling international performance acts, such as Ed Sheeran, Metallica, and Drake, to the online peer-to-peer marketplace StubHub. According to the Paradise Papers, Lavallee’s business brought nearly $8 million worth of sales into his Quebec-based company in 2014.
Catherine Moore, an adjunct professor of music technology and digital media at the University of Toronto, explains scarcity and demand has made so-called “ticket harvesting” a highly lucrative industry, one that has so far been able to effectively side-step attempts at regulation.
“It’s a big business,” Moore told CTV’s Your Morning on Monday. “There are people with the resources to pay $1,000 for a ticket, or even higher than that.”
Experts say large-scale operations like Lavallee’s would not be possible without the use of bots to assume multiple online identities, impersonating real people ready to buy seats as soon as online sales begin.
The speed at which bots can mimic human activity make them especially effective at snatching up hordes of tickets before human fans can.
Some provinces have rolled out changes to event-ticket legislation aimed at bolstering consumer protection from digital scalpers. In Ontario, for example, the proposed Ticket Sales Act includes a ban on bot software and a 50 per cent cap on the markup based on face value.
Moore said the changes fail to address re-sellers operating internationally, as Lavallee is said to have done.
“The loophole is jurisdictions outside of Ontario,” she said, in reference to the province’s legislation. “That makes it very hard to defend against.”
Consumer backlash over widely-scalped events, like the Tragically Hip’s farewell Man Machine Poem cross-Canada tour last summer, has increased public pressure on lawmakers to respond.
But Moore is convinced a market-based approach will be necessary to disrupt the booming resale economy. Put simply, increase supply by allowing easier, cheaper access for consumers to lower demand for overpriced tickets.
“One of the answers could be to have these big live concerts shown in movie theatres. You’d have great sound, great atmosphere, you’d be with other people, and the revenue from that could go to artists and their management,” she said.
Another solution, Moore suggests, may be to extend the presale period for tickets, and grant privileged access to artist fan club members and brand partners, to ensure those who actually plan to attend the event are prioritized.
Moore said she believes it is possible to outflank the tech-savvy resellers and rebalance the ticket market to the benefit of actual fans. She expects the issue will grab more attention as resellers ramp up their use of bot technology at the expense of consumers.
“With loopholes being closed on the technology side, and with imaginative new ways on the business side to enlarge access, I think there are ways forward,” she said.